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The Commonwealth of Puerto Rico defaulted on $312 million in principal and interest due Feb. 1st by four credit-issuing entities, including constitutionally protected General Obligation bonds, the government confirmed Wednesday.
The Puerto Rico government’s decision to default on a portion of the $470 million in debt service payments due Monday drew reactions from politicians, analysts and creditors alike, who both urged Congress to act on the Commonwealth’s behalf and predicted long court battles ahead.
The government of Puerto Rico will default on several debt payments due May 2, including $422 million due from the Government Development Bank, “regardless of whether Congress enacts pending fiscal oversight legislation,” Moody’s Investors Service predicted.
A decision by the Puerto Rico government to make the $354.7 million payment on Government Development Bank Senior Notes due today will come down to the wire and will depend on the outcome on talks with creditors, Gov. Alejandro García-Padilla said.
Uncertainty over the impact of new taxes on businesses may be putting a break on entrepreneurship with Puerto Rico's largest bank reporting a slowdown in its small business loan activity.
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